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Guys,
Plz i needed to know how to deal with the dividends proposed (or declared) on/before the statement of financial position’s date.
As far as i got, IAS 10 doesn’t consider it as liabilty and therefore it should be disclosed as a note. Is that right ? or should it be accounted for in the financial statements ?
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IAS 10 ( Events after the reporting date. )
According to IAS10
declaration of dividend after the reporting date( even if proposed before the reporting date) is a non-adjusting event and should be disclosed by note.but not quite correct! If the dividend has been declared BEFORE the year end, then an obligation has been created and should be reflected in the amounts shown in the FS. The important date is the date of creating the valid expectation in the minds of those affected. A dividend declared / proposed before the year end should be treated as a reduction in retained earnings and a current liability
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